Rethinking the Rules of the Game: Why AAM Demands a New Approach to Organizational Design

Imagine a world where the skies above our cities are alive with sleek, silent aircraft, ferrying people and packages with unprecedented speed and efficiency. This is the promise of Advanced Air Mobility (AAM), a revolutionary technology poised to reshape transportation as we know it. But as we stand on the cusp of this exciting new era, a critical question emerges:

how can organizations navigate the complexities of AAM and unlock its full potential?

The answer, as history has shown, lies in organizational design. Just as the pioneers of the automotive and aviation industries had to adapt their structures and strategies to accommodate groundbreaking new technologies, so too must the architects of AAM. To understand the challenges and opportunities ahead, we can draw valuable insights from the seminal work of Alfred Chandler and Jay Galbraith, whose ideas on organizational design continue to resonate in today's dynamic business landscape.

Alfred Chandler, in his groundbreaking book "Strategy and Structure" (1962), argued that organizational structure must evolve to support strategic goals. As he eloquently stated, "structure follows strategy," and "the most complex type of structure is the result of the concatenation of several basic strategies" .

He showed how successful companies adapted their structures to accommodate new product lines, geographic expansion, and changes in market conditions . This principle is particularly relevant to AAM, where organizations will need to adapt to new technologies, evolving regulations, and the complexities of operating in a three-dimensional airspace.   

Building on Chandler's work, Jay Galbraith's Star Model emphasizes the principle that "structure follows strategy." The Star Model highlights the interconnectedness of strategy, structure, processes, rewards, and people in achieving organizational effectiveness.

Galbraith states that "organization design is more than just structure. It is having policies and strategies that are aligned with one another" .

In the context of AAM, this means that organizations must carefully consider how these elements align to support the safe, efficient, and sustainable integration of AAM technologies.  

But what are the specific ways organizations can apply these principles to the unique challenges and opportunities of AAM? Let's delve deeper into some key questions that business leaders, policymakers, researchers, and industry leaders must consider:

1. What organizational structures will best foster innovation and agility in the face of rapid technological advancements in AAM?

AAM is a dynamic industry, with continuous advancements in aircraft design, automation, and airspace management. Organizations need to be structured to adapt quickly to these changes. This may require decentralized decision-making, cross-functional collaboration, and a culture that embraces experimentation and learning. As Galbraith suggests, 

"If management can identify the negatives of its preferred option, it can better design other policies around the Star Model™ to counter the negatives while achieving the positives" .

2. Why is it crucial for organizations to find the right balance between centralized control and decentralized autonomy in AAM operations?

AAM operations require a delicate balance between centralized oversight to ensure safety and compliance and decentralized autonomy to allow for rapid response to local conditions and customer needs. Finding the right balance will be crucial for optimizing both efficiency and responsiveness. Chandler observed that

"in order to centralize the response in each of several markets that required markedly different tactics, one had to decentralize the firm as a whole" .

3. What strategies can organizations employ to attract, develop, and retain the talent needed to support AAM operations, given the unique skillsets required for this emerging industry?

AAM requires a new breed of professionals with expertise in areas such as autonomous flight, electric propulsion, and airspace integration. Organizations must identify what those skillsets are and invest in training and development programs to ensure they have the talent pipeline needed to support their AAM ambitions.

4. What steps can organizations take to build public trust and acceptance of AAM technologies, addressing concerns about safety, noise, and environmental impact?

Public perception will play a crucial role in the success of AAM. Organizations must understand public concerns about safety, noise, and environmental impact and proactively address them through transparent communication, community engagement, and a commitment to responsible innovation.

5. Why is collaboration with policymakers and regulatory bodies essential for the safe and efficient integration of AAM into the existing airspace?

The regulatory landscape for AAM is still evolving. Organizations must actively engage with policymakers and regulatory bodies to shape the rules and standards that will govern AAM operations, ensuring safety, efficiency, and public acceptance.

These are just a few of the critical questions that organizations must grapple with as they navigate the exciting world of AAM. By embracing the principles of Chandler and Galbraith, and by fostering a culture of innovation, collaboration, and continuous learning, organizations can position themselves to lead the way in this transformative new era of transportation.

The future of AAM is not just about technological advancements; it's about organizational transformation. It's about reimagining how we structure our businesses, how we manage our processes, and how we empower our people to embrace the challenges and opportunities of this new frontier.

The journey ahead is filled with uncertainty, but also with immense potential. By asking the right questions and embracing the spirit of innovation, we can unlock the transformative power of AAM and create a future where the skies are truly the limit.

Sources:

1. Chandler, A. D. (1962). Strategy and structure: Chapters in the history of the American industrial enterprise. MIT Press. Used to provide historical context and foundational principles of organizational design, particularly the concept of "structure follows strategy."
2. Galbraith, J. R. (2002). Designing organizations: An executive briefing on strategy, structure, and process.Jossey-Bass. Used to explain Galbraith's Star Model and its application to organizational design in dynamic environments like AAM.
3. National Aeronautics and Space Administration (NASA). (2023). AAM Community Integration Considerations Playbook.
4. World Economic Forum. (2024). Advanced Air Mobility: Shaping the Future of Aviation.
5. McKinsey & Company. (2022). Perspectives on advanced air mobility.

Disclaimer:

This article is intended to provide general information and insights on the organizational design implications of Advanced Air Mobility (AAM). It does not constitute professional advice and should not be relied upon as such. The information presented is based on research and analysis available at the time of writing and may not reflect the most current developments in the AAM industry. Readers are encouraged to conduct their own research and consult with relevant experts for specific guidance on organizational design and AAM implementation.